Consensus “buy” rating
Currently, most of the analysts covering off-price retailer Ross Stores (ROST) have a “buy” recommendation. As of January 14, 58% or 15 out of the 26 analysts covering Ross Stores rated it as a “buy,” while 11 analysts rated the stock as a “hold.” None of the analysts had a “sell” recommendation for Ross Stores stock.
Multiple target price revisions
In November, several analysts lowered their target prices for Ross Stores following the company’s third-quarter results. There were concerns about how rising costs would impact Ross Stores. On November 21, Cowen and Company lowered its target price to $110 from $112. Jefferies reduced its target price to $86 from $90. Credit Suisse cut its target price to $95 from $100. Barclays revised its target price to $99 from $106. D.A. Davidson cuts its target price to $84 from $96, while Nomura cut its target price to $95 from $101. UBS revised its target price to $89 from $96. On November 22, RBC decreased its target price to $88 from $92.
On December 18, J.P. Morgan lowered its target price to $93 from $97. As of January 14, the average 12-month target price for Ross Stores stock was $94.61, which implies an upside of 4%.
Ross Stores has consistently proven the strength of its low-cost and off-price business model. The company expects to end fiscal 2018[1. Fiscal 2018 ends on February 2, 2019] with 1,477 Ross Dress for Less stores and 235 dd’s DISCOUNTS stores. The company thinks that there’s an opportunity to increase the store count for Ross Dress for Less stores to ~2,400 in the long term. Ross Stores aims to open 600 dd’s DISCOUNTS locations over the long term.
Next, we’ll discuss analysts’ expectations for Burlington Stores.